Housing Doom Housing Bubble Blog

A Friday interview with mortgage analyst Tom Lamalfa caught my eye this morning [Hat tip Mortgage321321 of Broker Outpost] because of the statistics Lamalfa quoted on Countrywide Financial:

Steve Henn: It’s ugly out there if you’re in the mortgage business — and it is not over.

Tom LaMalfa: I think there are going to be more large firms that fail.

Tom LaMalfa is an economist who advises mortgage companies.

LaMalfa: I almost fell out of my chair when I was going through Countywide financial statements last week. Countrywide is one of the largest mortgage companies in America. Right now, almost one-quarter of its subprime loans are delinquent — and subprime lending represents almost half of Countrywide’s total business. To me, that’s shocking — we have never seen numbers like that.

So if a series of big lenders fail, what will this mean for the economy? What happens to home buyers and homeowners with good credit who aren’t over-extended? Nothing good.

I also couldn’t help but be struck by the sign-off by Steven Henn, who was interviewing LaMalfa:

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The Greater Las Vegas Association of Realtors [GLVAR] released their numbers for home sales in July, and this report is a real "blast from the past."  1,318 single family homes sold in July- a level not seen since February 2002, and the median price has rolled back to March 2005 levels.

Median Price

The biggest news is the drop in the median home price, which dropped year-over-year from $310,000 last year to $295,000 in July 2007, for a 4.8% decline.  This is the largest YOY decline since the Las Vegas market started to slow.  [This figure is not adjusted for inflation, nor does it take into account seller incentives.  Actual price drops in many areas of Las Vegas exceed the median drop.]

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This post from Blown Mortgage was so informative, I felt compelled to not only borrow the info, but the title is well.  Blown Mortgage does a great job, and I’ve become a regular visitor.  This is from the Friday post:

A commenter correctly said that NovaStar was not the only one that ceased funding today; many other lenders did as well. Here is a quick summary of those that I know who temporarily (unless otherwise noted) pulled the lending plug today:

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